Pentagon picks Boeing to develop next-generation fighter jet
The award adds a new defense program to a company whose shares have been under pressure from a stalled Max 10 certification
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The award builds on a defense book that has been growing. Boeing won a contract for the MQ-25A drone earlier this month, and it secured a munitions sale to Saudi Arabia in early September. A next-generation fighter program would add a far larger, multi-year stream of revenue and backlog on top of those wins.
The contract lands separately from the trouble facing Boeing's commercial side. The Max 10 has faced repeated delays in certification. Boeing pushed back certification again on Monday. The FAA has been reviewing a flight management computer problem on the jet, raised days after Boeing said its testing was complete. FAA administrator Bedford has described the delay as open-ended. WestJet has confirmed it runs the software version now under that review on its own Max jets.
The fighter jet award falls into a different part of Boeing's business, defense manufacturing rather than commercial deliveries, and does not touch the cash-flow and delivery concerns that have weighed on the stock. It also comes as the Pentagon has loosened audit rules for contractors, which could ease execution risk on a program of this scale. Taken together, the award points to a stronger defense pipeline sitting alongside an unresolved commercial problem.